Saturday, April 27, 2013

Another long travel day today, so for now a quick post via Brad DeLong:

Global Inequality: Saturday Twentieth Century Economic History Weblogging:
Those economies relatively rich at the start of the twentieth century have
by and large seen their material wealth and prosperity explode. Those
nations and economies that were relatively poor have grown richer, but for
the most part slowly. The relative gulf between rich and poor economies has
grown steadily over the past century. Today it is larger than at any time in
humanity’s previous experience...

This glass can be viewed either as half empty or as half full. The glass is
half empty: we live today in a world that is nearly the most unequal world
ever. Only the world of the 1970s and 1980s—with standards of living in
China greatly depressed by the legacy of Mao, his Great Leap Forward, and
his Cultural Revolution and with standards of living in India depressed to a
lesser extent by the License Raj of the Nehru Dynasty—was more unequal than
ours is, even today. The glass is half full: most of the world has already
made the transition to sustained economic growth; most people live in
economies that (while far poorer than the leading-edge post-industrial
nations of the world’s economic core) have successfully climbed onto the
escalator of economic growth and thus the escalator to modernity. The
economic transformation of most of the world is less than a century behind
the of the leading-edge economies...

On the other hand, one and a half billion people live in economies that have
not made the transition to economic growth, and have not climbed onto the
escalator to modernity. It is hard to argue that the median inhabitant of
Africa has a higher real income than his or her counterpart of a generation
ago.

From an economist’s point of view, the existence, persistence, and
increasing size of large gaps in productivity levels and living standards
across nations seems bizarre. We can understand why pre-industrial
civilizations had different levels of technology and prosperity: they had
different exploitable nature resources, and the diffusion of new ideas from
civilization to civilization could be very slow. Such explanations do not
apply to the world today. The source of the material prosperity seen today
in leading-edge economies is no secret: it is the storehouse of
technological capabilities.. Most of it is accessible to anyone who can
read. Almost all of the rest is accessible to anyone who can obtain an M.S.
in Engineering. Because of modern telecommunications, ideas today spread at
the speed of light. Governments, entrepreneurs, and individuals in poor
economies should be straining every muscle ... to do what Japan began to do
in the mid-nineteenth century: acquire and apply everything in humanity's
storehouse of technological capabilities.

This “divergence” in living standards and productivity levels is another key
aspect of twentieth century economic history: economies are, by almost every
measure, less alike today than a century ago in spite of a century’s worth
of revolutions in transportation and communication. Moreover, there seems to
be every reason to fear that this “divergence” in living standards and
productivity levels will continue to grow in the future. ...

This is a potential source of great danger, because today’s world is
sufficiently interdependent—politically, militarily, ecologically—that the
passage to a truly human world requires that we all get there at roughly the
same time.

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Brad DeLong: Global Inequality

Another long travel day today, so for now a quick post via Brad DeLong:

Global Inequality: Saturday Twentieth Century Economic History Weblogging:
Those economies relatively rich at the start of the twentieth century have
by and large seen their material wealth and prosperity explode. Those
nations and economies that were relatively poor have grown richer, but for
the most part slowly. The relative gulf between rich and poor economies has
grown steadily over the past century. Today it is larger than at any time in
humanity’s previous experience...

This glass can be viewed either as half empty or as half full. The glass is
half empty: we live today in a world that is nearly the most unequal world
ever. Only the world of the 1970s and 1980s—with standards of living in
China greatly depressed by the legacy of Mao, his Great Leap Forward, and
his Cultural Revolution and with standards of living in India depressed to a
lesser extent by the License Raj of the Nehru Dynasty—was more unequal than
ours is, even today. The glass is half full: most of the world has already
made the transition to sustained economic growth; most people live in
economies that (while far poorer than the leading-edge post-industrial
nations of the world’s economic core) have successfully climbed onto the
escalator of economic growth and thus the escalator to modernity. The
economic transformation of most of the world is less than a century behind
the of the leading-edge economies...

On the other hand, one and a half billion people live in economies that have
not made the transition to economic growth, and have not climbed onto the
escalator to modernity. It is hard to argue that the median inhabitant of
Africa has a higher real income than his or her counterpart of a generation
ago.

From an economist’s point of view, the existence, persistence, and
increasing size of large gaps in productivity levels and living standards
across nations seems bizarre. We can understand why pre-industrial
civilizations had different levels of technology and prosperity: they had
different exploitable nature resources, and the diffusion of new ideas from
civilization to civilization could be very slow. Such explanations do not
apply to the world today. The source of the material prosperity seen today
in leading-edge economies is no secret: it is the storehouse of
technological capabilities.. Most of it is accessible to anyone who can
read. Almost all of the rest is accessible to anyone who can obtain an M.S.
in Engineering. Because of modern telecommunications, ideas today spread at
the speed of light. Governments, entrepreneurs, and individuals in poor
economies should be straining every muscle ... to do what Japan began to do
in the mid-nineteenth century: acquire and apply everything in humanity's
storehouse of technological capabilities.

This “divergence” in living standards and productivity levels is another key
aspect of twentieth century economic history: economies are, by almost every
measure, less alike today than a century ago in spite of a century’s worth
of revolutions in transportation and communication. Moreover, there seems to
be every reason to fear that this “divergence” in living standards and
productivity levels will continue to grow in the future. ...

This is a potential source of great danger, because today’s world is
sufficiently interdependent—politically, militarily, ecologically—that the
passage to a truly human world requires that we all get there at roughly the
same time.